2017 Budget Final December 14 2016 Budget Process

2017 Budget – Final December 14, 2016

Budget Process Public Budget Work Sessions, which are open to the public, are held each fall. This year there were 5 sessions: Ø Ø Ø Thursday, October 20 at 5: 30 pm - Overview Thursday, October 27 at 5: 30 pm – Department Heads Wednesday, November 2 at 5: 30 pm – Volunteer Boards Wednesday, November 9 th after 7 pm (Preliminary Budget) Wednesday, December 14 th after 7 pm (Final Budget) 2017 Budget

Goals and Priorities Established June 2016 Ø Developing a Sustainable Funding Plan Ø Managing Development & Growth Ø Acquire Open Space, Develop Parks & Provide Recreational Programming Ø Develop Renovated Municipal Infrastructure & Provide Comprehensive Services Ø Citizen Involvement & Township Identity 2017 Budget

2017 Goals and Metrics Administration Goal Measurement Target Completion Date Developing a Sustainable Funding Plan Create Five Year Financial Plan with Sustainable Revenues Supporting Desired Service Levels Q 4 2017 Managing Development & Growth Refer to Planning, Zoning & Development Acquire Open Space, Develop Parks & Provide Recreational Programming Identify Properties for Acquisition; Design Concept Plans for Key Parks; Complete Recreation Needs Analysis Q 2 2017 Q 3 2017 Develop Renovated Municipal Infrastructure & Provide Comprehensive Services Complete Feasibility Study for Administration, Public Safety & Trail Head Facilities Q 3 2017 Launch New Website; Increase e-News Subscriptions; Develop Branding Strategy Q 1 2017 Q 3 2017 Q 2 2017 Citizen Involvement & Township Identity 2017 Budget

2017 Goals and Metrics - Finance Goal Measurement Target Completion Date Update Finance Policy & Procedure Manual Completed Manual Q 2 2017 Update Employee Manual Completed Manual Q 3 2017 Completed Job Descriptions Q 4 2017 Process communicated to employees Q 4 2017 Update Job Descriptions Create a Performance Review & Evaluation Process 2017 Budget

2017 Goals and Metrics - Police Goal Measurement Target Completion Date Fully adopted standards and certification per the PA accreditation commission Begins 2 Q 2017; Ends 4 Q 2018 All Officers experience low-level shooting Q 4 2017 Community Policing to Improve Quality of Life Bike Patrol – Access to Citizens & Crime Prevention Special Interest Areas – HOAs, Neighborhoods & Communities Community Partnerships – GVSD, Colleges, Senior Groups Q 2 2017 Shoot or Don’t Shoot Exercises Officers Successfully Complete Exercise within One Year Q 4 2017 Complete update with all policies & local ordinances Q 4 2017 Accreditation Firearms Proficiency & Low-Level Light Qualifications Policy Manual Revisions & Ordinances 2017 Budget

2017 Goals and Metrics Codes & Life Safety Goal Measurement Target Completion Date Establish an on-going Fire Inspection Program (Community Risk Reduction) Conduct 150 Inspections during the first year Ongoing Beginning Q 1 2017 Update/Expand the Emergency Operations Plan Completion / Submittal to CCDES Q 4 2017 Enhance training for the Foam Trailer Eight Firefighter/EMTs to receive specialized Foam training Q 4 2017 Obtaining all equipment Q 4 2018 Certification Q 4 2017 Enhance equipment to support the Foam Trailer All Assistant Fire Marshals to be certified in Emergency Management 2017 Budget

2017 Goals and Metrics Planning & Development Goal Measurement Target Completion Date Completed Update Q 4 2018 Completed Map Q 1 2017 Route 30 Corridor Study Completed Study Q 2 2018 Transportation (Act 209) Study Completed Study Q 2 2018 Convert Files to Uniform System Q 4 2018 Comprehensive Ordinance Update Official Township Map Streamline Paper Records 2017 Budget

2017 Goals and Metrics Public Works Department Goal Measurement Review, Revise & Complete Park Design for the Swanenburg Property; Evaluate and Select Options for Birch Road Park Improvements Plans are ready for bid for a Spring of 2018 Construction; Evaluate and Select Options for Birch Road Park Improvements Options selected and installed Increase Road Resurfacing by 30% over 2016 Complete 35, 000 SY of resurfacing Replace Culvert under Spring Road Project Completion Complete design of Planebrook Road Pump Station and begin construction Implement Sewer Rate Charge to Maintain Current Service Levels 2017 Budget Target Completion Date Q 4 2017 Q 3 2017 Pump Station under construction Q 3 2017 Implement Rate Increase, Taking in Account Annual Payment Discount of 2% Q 3 2017

General Fund Final Budget December 14, 2016

General Fund: Revenue & Expenditure Trends $14 Millions $12 $10 $8 $6 Revenue $4 Expenses $2 $0 2014 2015 2016 2017 $497, 287 $1, 151, 191 ($441, 270) ($631, 911) Operating Surplus (Deficit) There was a change in accounting method for local taxes in 2015. The deficit on a cash basis would have been $117, 565. 2017 Budget

2017 Final Budget: Revenue Comparison General Fund Revenues 2016 Approved Budget 2017 Proposed Budget % Change 2016 to 2017 Earned Income Tax $5, 400, 000 $5, 300, 000 -1. 9% Local Services Tax 1, 170, 000 1, 209, 000 3. 3% Real Estate Tax 620, 854 640, 174 3. 2% Real Estate Transfer Tax 800, 000 1, 000 25% Permits, Licenses, Fees 1, 888, 400 1, 948, 275 3. 2% Fines 160, 000 100, 000 -37. 5% Interest Earnings 8, 650 3, 750 -56. 6% Pension Aid, State Shared Revenue 425, 083 434, 995 4. 5% Grants 587, 000 46, 228 -92. 1% Liquid Fuels 325, 380 0 -100. 0% Other 59, 199 66, 090 11. 6% Total Revenues $11, 444, 566 $10, 748, 512 -6. 1% 2017 Budget

Total Real Estate Tax Bill Great Valley School District 20. 80 per mil $4, 254 81. 0% Chester County East Whiteland 4. 163 per mil $851 17. 2% . 445 per mil $91 1. 8% (Amounts based on average residential assessment of $204, 500) 2017 Budget

Real Estate Tax Rates Ø Tax Rate: $0. 445 for Every $1, 000 in Assessed Value Ø No Tax Increase in 2017 Ø In 1996, Earned Income Tax (EIT) was adopted at 0. 5% and has remained steady for 20 years. Ø Between 1996 and 1999, Real Estate Tax (RET) rate dropped a total of 98. 2% changing from 24. 2 to 0. 445 mills. Ø Impact Ø Average Residential Assessment - $204, 500 (Nov 2015) Ø Average Annual Township Taxes = $91. 00 Ø Rate is 11 th lowest of 73 Municipalities in Chester County Ø No business privilege or mercantile tax 2017 Budget

2017 Final Budget Workforce Department Full Time Part Time (FTE) Total FTE Employees Administration 5 2 (1) 7 Codes & Life Safety 15 11 (3. 6) 18. 6 Planning & Zoning 2 1 (0. 7) 2. 7 Police 22 14 (4. 0) 26. 0 Public Works 15 2 (1) 16 Recreation 0 18 (0. 9) 0. 9 Total Employees 60 48 (11. 2) 71. 2 2017 Budget

Statewide Challenges: Fix The Numbers PA League of Municipalities 41% of Pennsylvanians live in a municipality that is financially distressed. * Ø Unsustainable public safety employee pensions. Ø 66 of Pennsylvania’s 67 counties have at least one municipality with a pension plan under a high level of financial stress. ** Ø Outdated binding arbitration law handcuffs municipalities during negotiations. Ø Under current law, fiscal stability does not have to be considered when new contracts are awarded through binding arbitration. Ø Tax-exempt properties within municipal borders use services, but pay no taxes. Ø In Pennsylvania, at least 542 communities have a significant percentage of taxexempt properties. *Pennsylvania Economy League of Greater Pittsburgh, April 2015 **Public Employee Retirement Commission, 2012 2017 Budget

2017 Final Budget: Expenditure Comparison General Fund Appropriations 2016 Approved Budget 2017 Proposed Budget % Change 2016 to 2017 Administration $1, 412, 044 $1, 579, 938 11. 9% Police * 4, 811, 305 4, 820, 663 1. 9% Codes & Life Safety 2, 792, 180 2, 740, 312 (1. 9%) Public Works ** 2, 067, 322 1, 561, 428 (24. 5%) Planning & Zoning 183, 754 363, 112 97. 6% Parks & Recreation 89, 218 90, 796 1. 2% Total Operating Expense $11, 379, 923 $11, 156, 249 (2. 0%) Debt Service 505, 560 224, 174 (55. 7%) Transfer to Other Funds 50, 000 0. 0% Total Expenses $11, 935, 483 $11, 430, 423 (4. 2%) *IT moved to Administration ** ARLE Traffic Grant moved to Capital Fund 2017 Budget

2017 Final Budget: General Fund Expenditures Operating Costs 11% Road Maintenance 12% Utilities 2% Vehicles [PERCENTAGE] Debt Service 4% 2017 Budget Salaries and Benefits 68%

2017 Final Personnel Costs: Annual Rate Increases 2014 2015 2016 2017 Police* 3. 75% 3. 95% 4. 0% Firefighters* 3. 5% ** Codes & Life Safety 3. 95% 3. 0% Public Works* 3. 95% 3. 0% Administration 3. 95% 3. 0% *Collectively Bargained **Currently being negotiated 2017 Budget

Pension Funds: Minimum Municipal Obligations (MMO) Year Police Non-uniformed Fire Total % Change 2013 $226, 207 $373, 698 $82, 023 $681, 928 23% 2014 $232, 636 $372, 463 $85, 251 $690, 350 1% 2015 $341, 597 $343, 163 $75, 802 $760, 562 10% 2016 $353, 111 $344, 313 $85, 040 $782, 464 3% 2017 $301, 808 $229, 024 $104, 772 $635, 604 (18. 8%) 2017 Budget

Current Healthcare Plans: Cost Trends $2, 000 1, 900, 170 1, 832, 200 $1, 800, 000 1, 682, 300 1, 798, 619 1, 623, 706 $1, 600, 000 $1, 400, 000 $1, 200, 000 1, 350, 400 1, 325, 500 2011 2012 1, 112, 300 $1, 000 $800, 000 $600, 000 $400, 000 $200, 000 $0 2013 2014 2015 2016 2017 Township Switched Insurers in February 2016, Saving 17%. January 2017 Renewal Rate is 7. 57% or Half of Rate Cap of 15%. 2017 Budget

2017 Final Budget: General Fund Summary General Fund 2014 Actual 2015 Actual 2016 Budget 2016 Projection 2017 Budget Revenues $10, 782, 913 $12, 042, 541 $11, 444, 567 $12, 795, 567 * $10, 748, 512 Expenditures 10, 285, 626 11, 408, 045 11, 885, 837 11, 433, 426 Surplus (Deficit) $497, 287 $634, 496 ($441, 270) $909, 730 ($684, 914) ** Transfer to Other Funds 142, 397 3, 000 50, 000 Net change in Fund Balance $639, 684 ($2, 032, 558) ($491, 270) $859, 730 ($734, 914) Beginning Balance $4, 991, 335 $5, 631, 019 $3, 598, 461 $4, 458, 191 Post Transfer Balance $5, 631, 019 $3, 598, 461 $3, 107, 191 $4, 458, 191 $3, 723, 277 Desired Operating Reserve 17% $1, 748, 556 $1, 939, 368 $2, 020, 592 $1, 943, 682 * The 2016 projection includes $850, 000 for Liberty Transfer Taxes and $501, 000 for the sale of the Public Works Garage. ** Consistent with our fund balance practices, the 2017 deficit will be funded from the Tax Stabilization Reserve of $1, 750, 000. 2017 Budget

December 2016 Fund Balances (Savings Accounts) Ø General Fund ($3. 6 Million) and Capital Improvement Fund ($5. 9 Million) Ø Operating Contingency (17% or $1, 743, 000) Ø Tax Stabilization (17% or $1, 750, 000) Ø Long Term Road Improvement Plan Ø Age and price all Township roads over the next 12 to 15 years, using average estimated useful life Ø Minimize budget volatility each year Ø Started replacing highest risk roads in 2016 Ø $500, 000 transferred into Capital Improvement Fund Ø Long Term Capital Equipment Plan Ø Minimize budget volatility each year Ø $500, 000 transferred into Capital improvement Fund Ø Started amortizing $367, 600 in 2016 2017 Budget

2017 Final Budget: $632, 000 Deficit Further Solutions Considered (Grants, Cost Savings & Increased Fees) Ø Apply for More Grants to Offset Expenses Ø Additional Cost Reduction Initiatives - Limited Ø Wages & Benefits – Governed by Labor Contracts Ø Operating Expenses Ø 11% of Total Expenses Ø Mostly Fixed Costs Ø Fee Schedule Changes – Multiple Solutions Pending 2017 Budget

2017 Final Budget Conclusion Ø No tax increase proposed for 2017. Ø Board of Supervisors and staff continually evaluate the budget and Township operations to contain costs and improve efficiency. Ø The tax climate for residents and businesses remains favorable. Ø Services provided by Boards and Commissions and volunteers play a significant role in containing costs. Ø Township staff must continue working with Developers to complete projects that will fund transportation and infrastructure improvements, keep taxes affordable, ensure healthy business climate, prevent blight and serve Township residents. 2017 Budget

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